Affordable Care Act offers options for rural residents

Farmers, ranchers and rural residents in general may see little or no change in where, how and what they pay for insurance following implementation today of the Affordable Care Act Health Insurance Exchange.

Farmers, ranchers and rural residents in general may see little or no change in where, how and what they pay for insurance following implementation today of the Affordable Care Act Health Insurance Exchange.

But they also may have more choices, fewer restrictions, especially for those who have pre-existing conditions, and possibly lower premiums.

“Buying insurance for rural families will not be much different than shopping for private insurance before the Affordable Care Act,” says Joyce Cavanagh, Texas AgriLife associate professor and Extension family economics specialist at College Station. “But they may have more luck,” especially if they have been buying private insurance. The exchange offers a new vehicle to shop for insurance based on needed coverage and price.

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Those with pre-existing conditions are also now able to buy affordable insurance, she said, where they may not have been able to buy policies before. “Now, they can’t be denied, and some may be eligible for insurance subsidies,” to help pay the premiums.

Also, insurance companies can no longer place lifetime caps on coverage, so serious illnesses or catastrophic accidents will continue to be covered.

For those who already have insurance and are happy with their plans or for those covered by employers, nothing will change.

“But persons who have been buying private insurance may want to look at the exchange to compare coverage and price,” she said.

Catastrophic insurance coverage is also available and may appeal to young adults who believe that full coverage is unnecessary. Cavanagh said the annual “out-of-pocket limit” for catastrophic insurance is $6,250. Catastrophic policies are available only to persons under 30 years of age.

She said younger adults often assume they do not need insurance since they are young and healthy. “But accidents don’t select just those who are insured,” she said. Also, she noted that young people do contract the flu, occasionally get pneumonia and other diseases that they may either be treated for at emergency rooms or get no treatment at all.

That’s also an issue in rural America, she said, where many uninsured persons who need medical attention fail to get it because of cost. “Some are ticking time bombs,” she said, “with health issues that are not treated.”

With possibilities of affordable insurance through an exchange and the possibility of subsidies to help pay premiums, those individuals now may get treatments they need.

She said choosing a doctor under the Affordable Care Act insurance program would be similar to how folks choose them now. With company-provided or private health policies, some insurance companies offer “in-network” or “out-of-network,” doctor and facility options with out-of-network choices requiring larger co-pays or other fees.

Most individuals who will be insured for the first time under the Affordable Care Act do not have primary care physicians in place.

Cavanagh said some small businesses, including farms and ranchers, have expressed concern that under the new law they would be required to provide insurance to their employees. If they have fewer than 50 employees they do not have to provide insurance, she said. Also, if they use contract labor, they do not have to provide insurance for those workers. “Only if they provide a W-2 (and employ more than 50 workers) do they need to provide insurance,” she said.

The critical and most stressful aspect of health care for rural areas, she said, is the shortage of facilities and physicians that serve small rural communities. She suggested that individuals shopping the insurance exchanges should look at the facilities listed before making decisions.

Cavanagh said reports of the insurance exchange website likely created a lot of frustration on its first day of service. “But it does show that demand across the country is high. There is a lot of interest and a lot of need.”

She also said those interested in shopping the exchange might wait a bit until traffic diminishes. “It’s just the first day. People have time.” Anyone who signs up by Dec. 15 will be covered Jan 1. Initial signup extends into March, 2014.

Shop around

Roberta Riportella, the Kansas Health Foundation’s professor of Community Health at Kansas State University, says farmers may be more likely to be insured than others in the U.S. population since their work is hazardous.

“Purchasing health insurance and disability insurance is viewed by many farmers as essential elements in protecting their family farms,” Riportella said.

They may also face higher insurance premiums, according to Barbara O’Neill, an Extension specialist in financial resource management at Rutgers University. “Because premiums in the individual health insurance market are rated based on the individual’s own risks, they have been exceptionally high for farmers,” she said. The new law, she added, makes it more likely that “farm families will be able to purchase less expensive coverage. Tax credits are available to help the smallest employers (less than 25 employees) pay for the cost of employee health insurance.”

O’Neill said the mandate for large farms (more than 50 employees) to provide health care coverage is currently delayed. So fines, which could be as much as $3,000 for every employee, will not be imposed until January 2015.

Riportella shared three tips to help farm families make decisions about insurance coverage for themselves and their employees:

Compare the cost and features of your current insurance with those in the new insurance ‘marketplace.’ State-based navigators and insurance agents can assist farmers in making decisions on personal insurance. “If you are considering insurance for your farm business, consult an insurance broker, employment law attorney, certified financial planner or others you trust,” she said.

Consult with a professional farm advisor to develop an action plan for the business.

Allow enough time to shop around and select insurance coverage that is both affordable and adequate.